Here is an interesting twist on microfinance by West African and Dominican immigrants in Philadelphia.
In this version, the nonprofit fronts the money so that each participant can get a small loan right away — in the case of the Woodland Avenue group, either $500 or $1,000 — rather than waiting their turn for a larger lump sum. But like a traditional ROSCA, everyone shares the risk, via an agreement to assume responsibility for their peers' debts. That peer pressure drives near-perfect repayment rates.
There seems to be a geographic risk here: If a large grocer opens nearby, many bodegas will see demand plummet and risk-sharing among them won't absorb the shock to their ability to repay the loans.
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